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2011 in Review: Patents Misused to Stifle Innovation

As the year draws to a close, EFF is looking back at the major trends influencing digital rights in 2011 and discussing where we are in the fight for a free expression, innovation, fair use, and privacy.

2011 saw what many had written off as impossible: patent reform legislation became law. Despite the urgent need for reform to today’s patent system, the new law – the America Invents Act – managed to do almost nothing to address many of the most pressing problems facing innovators. To be sure, the law included some big changes – the shift from “first-to-invent” to “first-to-file” and alterations to the PTO’s funding and fee-setting authority – but it failed to create robust new procedures for effectively challenging bad patents. It also failed to address one of the biggest problems with the patent system today: predatory patent trolls. (We were at least encouraged to see that the bill’s language did signal that at least some in Congress are generally unhappy with business method patents.)

Speaking of patent trolls, 2011 also brought us a new, especially egregious, type of patent troll. Lodsys LLC, a company who makes and sells nothing, targeted app developers with threats of litigation (and, in some instances, actual lawsuits), claiming infringement based on in-app purchasing and upgrade technologies. The problem, of course, is that the cell phone operating system companies such as Apple and Google provide these technologies to the developers yet fail to defend those developers when they’re hit with a lawsuit. Apple has moved to intervene in ongoing Lodsys litigation, and Google has filed a reexamination of the patents at the PTO; we’ll continue to monitor those actions. But, in the meantime, it’s no wonder that app developers are removing their apps from U.S. markets, to the detriment of users and the economy at large.

The courts, too, were busier than ever on the patent front. The struggle to define “patentable subject” matter in the wake of Bilskicontinued apace. The Federal Circuit in the second half of this year issued three separate rulings on the limits of abstract subject matter and has managed to further confuse (who knew that was even possible?) the matter. We’ll continue to monitor cases going on across the country for chances to weigh in and urge courts that patents that are too abstract are bad news for innovation. We'll push courts to construct standards surrounding patentable subject matter, and other requirements of patentability (for example, the written description requirement), that make sense.

EFF also weighed in on matters related to joint infringement, urging the Federal Circuit to uphold a rule limiting liability of third-party users, consumers, and developers. EFF also filed a brief at the Supreme Court arguing for a lower standard of review for invalidating bad patents (a case where we believe the Court came out wrong). We also watched the “breast cancer gene” case work its way through the Federal Circuit, and will continue to closely monitor a case that is likely to land in front of the Supremes next year. The Supreme Court hasn’t shied away from addressing patent issues lately, and we’ll continue to do our best to help courts at all levels navigate these cases in a way that protects innovation and consumers.